Why Bush wants to protect phone firms

Industry help seen as vital for more than NSA eavesdropping

Eric Lichtblau, James Risen and Scott Shane, New York Times

Published
4:00 am PST, Sunday, December 16, 2007

For months, the Bush administration has waged a high-profile campaign, including personal lobbying by President Bush and closed-door briefings by top officials, to persuade Congress to pass legislation protecting companies from lawsuits for aiding the National Security Agency's warrantless eavesdropping program.

But the battle is really about something much bigger. At stake is the federal government's extensive but uneasy partnership with industry to conduct a wide range of secret surveillance operations in fighting terrorism and crime. The NSA's reliance on telecommunications companies is broader and deeper than ever before, according to government and industry officials, yet that alliance is strained by legal worries and the fear of public exposure.

To detect narcotics trafficking, for example, the government has been collecting the phone records of thousands of Americans and others inside the United States who call people in Latin America, according to several government officials who spoke on the condition of anonymity because the program remains classified.

But in 2004, one major phone carrier balked at turning over its customers' records. Worried about possible privacy violations or public relations problems, company executives declined to help the operation, which has not been previously disclosed.

In a separate NSA project, executives at a Denver phone carrier, Qwest, refused in early 2001 to give the agency access to their most localized communications switches, which primarily carry domestic calls, according to people aware of the request, which has not been previously reported. They say the arrangement could have permitted neighborhood-by-neighborhood surveillance of phone traffic without a court order, which alarmed them.

The federal government's reliance on private industry has been driven by changes in technology. Two decades ago, telephone calls and other communications traveled mostly through the air, relayed along microwave towers or bounced off satellites. The NSA could vacuum up phone, fax and data traffic merely by erecting its own satellite dishes. But the fiber optics revolution has sent more and more international communications by land and undersea cable, forcing the agency to seek company cooperation to get access.

After the disclosure two years ago that the NSA was eavesdropping on the international communications of terrorism suspects inside the United States without warrants, more than 40 lawsuits were filed against the government and phone carriers. As a result, skittish companies and their lawyers have been demanding stricter safeguards before they provide access to the government and, in some cases, are refusing outright to cooperate, officials said.

"It's a very frayed and strained relationship right now, and that's not a good thing for the country in terms of keeping all of us safe," said an industry official who believes that immunity is critical for the phone carriers. "This episode has caused companies to change their conduct in a variety of ways."

With a vote in the Senate on the issue expected as early as Monday, the Bush administration has intensified its efforts to win retroactive immunity for companies cooperating with counterterrorism operations.

"The intelligence community cannot go it alone," Mike McConnell, the director of national intelligence, wrote in a New York Times opinion piece Monday urging Congress to pass the immunity provision. "Those in the private sector who stand by us in times of national security emergencies deserve thanks, not lawsuits."

The government's dependence on the phone industry, driven by the changes in technology and the Bush administration's desire to expand surveillance capabilities inside the United States, has grown significantly since the Sept. 11 attacks. The NSA, though, wanted to extend its reach even earlier.

In December 2000, agency officials wrote a transition report to the incoming Bush administration, saying the agency must become a "powerful, permanent presence" on the commercial communications network, a goal that they acknowledged would raise legal and privacy issues.

While the NSA operates under restrictions on domestic spying, the companies have broader concerns - customers' demands for privacy and shareholders' worries about bad publicity.

In the drug-trafficking operation, the NSA has been helping the Drug Enforcement Administration in collecting the phone records showing patterns of calls between the United States, Latin America and other drug-producing regions. The program dates to the 1990s, according to several government officials, but it appears to have expanded in recent years.

Officials say the government has not listened to the communications, but has instead used phone numbers and e-mail addresses to analyze links between people in the United States and overseas. Senior Justice Department officials in the Bush and Clinton administrations signed off on the operation, which uses broad administrative subpoenas but does not require court approval to demand the records.

At least one major phone carrier - whose identity could not be confirmed - refused to cooperate, citing concerns in 2004 that the subpoenas were overly broad, government and industry officials said.

The DEA declined to comment on the call-tracing program, except to say that it "exercises its legal authority" to issue administrative subpoenas. The NSA also declined to comment on it.

In a separate program, NSA officials met with the Qwest executives in February 2001 and asked for more access to their phone system for surveillance operations, according to people familiar with the episode. The company declined, expressing concerns that the request was illegal without a court order.

While Qwest's refusal was disclosed two months ago in court papers, the details of the NSA's request were not. The agency, those knowledgeable about the incident said, wanted to install monitoring equipment on Qwest's "Class 5" switching facilities, which transmit the most localized calls. Limited international traffic also passes through the switches.

A government official said the NSA intended to single out only foreigners on Qwest's network, and added that the agency believed Joseph Nacchio, then the chief executive of Qwest, and other company officials misunderstood the agency's proposal. Bob Toevs, a Qwest spokesman, said the company did not comment on matters of national security.

Other NSA initiatives have stirred concerns among phone company workers. The facts behind one class-action lawsuit in San Francisco are shrouded in government secrecy. The case relies on disclosures by a former AT&T employee, Mark Klein, who says he stumbled upon a secret room at a company facility in San Francisco that was reserved for the NSA. Company documents he obtained and other former AT&T employees have lent some support to his claim that the facility gave the agency access to a range of domestic and international Internet traffic.

The telecommunications companies that gave the government access are pushing hard for legal protection from Congress. As part of a broader plan to restructure the NSA's wiretapping authority, the Senate Intelligence Committee agreed to give immunity to the telecommunications companies, but the Judiciary Committee refused to do so. The White House has threatened to veto any plan that leaves out immunity, as the House bill does.

"Congress shouldn't grant amnesty to companies that broke the law by conspiring to illegally spy on Americans," said Kate Martin, director of the Center for National Security Studies in Washington.